As I will explain, the short-run economic crisis has health policy causes and effects—and arguably the most serious long-run economic challenge is our broken health care system. I’ll conclude with suggestions on policies to address both sets of problems.

The health care system is an integral part of the nation’s economy. It accounts for 14 million jobs, improves the quality of life for millions, and provides—to some people in some places—the world’s best quality care.

Yet, we have by far the most expensive health system in the world. The United States spends nearly $500 billion more than peer nations, adjusting for wealth. The next most expensive system spends about half as much per person on health care. To put this in context, Americans spend more on health care than housing or food. We spend over five times more on health care than gas. The average annual premium of an employer-based health insurance plan in 2008 ($12,680) is the equivalent of 60 percent of the poverty threshold for a family of four, and 93 percent of the annual earnings of a minimum-wage worker—not counting cost sharing. Anecdotes suggest that businesses pay more for health care than other costs of doing business: more than steel for General Motors and more than coffee beans for Starbucks.